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CMS Finalizes Review Choice Demonstration for Home Health Agencies

On September 26, 2018, the Centers for Medicare & Medicaid Services (“CMS”) announced plans to commence a review demonstration of Home Health Agencies (“HHAs”) in Illinois, Ohio, North Carolina, Florida, and Texas, with the option to expand to other states in the JM jurisdiction. CMS invited public comment on CMS’ new proposal in the Federal Register by October 29, 2018. The Pre-Claim Review Demonstration (“PCRD”) was re-named the Review Choice Demonstration (“RCD”) and began in Illinois on December 10, 2018.

The RCD is a revised version of the PCRD. The PCRD went into effect in August 2016 but was short-lived, as it was halted in April 2017 due to wide backlash among Home Health Industry providers. Thus, the new RCD should be more welcomed HHAs, as it is much more flexible than the previously rigid PCRD.

The Secretary is authorized to “develop or demonstrate improved methods for the investigation and prosecution of fraud in the provision of care or services under the health programs established under [the Act].” Based on this authority, CMS implemented the RCD to help identify, investigate, and prosecute potential fraud occurring within HHAs who are providing services to Medicare beneficiaries. The RCD is intended to ease the burden on CMS by reducing the number of audits while protecting the Medicare Trust Fund by ensuring that payments for home health services are appropriate.

The RCD requires that HHAs operating within the target states choose between 100% pre-claim review, 100% post-payment review, or a minimal review that results in a 25% payment reduction of all claims submitted. Providers who participate in a pre-claim or post-payment review will continue to be subject to these reviews until the HHA reaches an approval rate of 90% or higher, which is calculated every 6 months. Once the provider reaches an approval rate of 90% or higher, it must select from one of the following options: 100% pre-payment reviews; selective post-payment reviews performed by their MAC every 6 months; or random spot checks of 5% of HHA claims every 6 months. Providers who elect a minimal review with a 25% reduction on all payable claims are excluded from Targeted Probe and Educate reviews.

For pre-claim reviews, HHAs will send in all documentation required by the pre-claim review request to the Medicare Administrative Contractor (“MAC”).  CMS will ensure that applicable coverage, payment, and coding rules are met before a final claim is submitted for Medicare payment. HHAs may begin providing home health services to beneficiaries while awaiting the decision on the pre-claim review, thus eliminating concerns HHAs might have had regarding a delay in treatment while waiting for these reviews to occur. MACs have ten days to inform the HHA whether their pre-claim review has or has not been affirmed.

If you or your healthcare entity has any questions about the RCD, HHAs generally, or any other related questions, please contact an experienced healthcare attorney at (248) 544-0888, or via email at You may also subscribe to our health law blog by adding your email at the top right of this page.

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